Question：Which of the following additional services provided to an audit client are likely to impair independence?

　　A. Provision of recruitment services in relation to a key management position for a listed company.

　　B. IT systems services for a listed company.

　　C. Accounting services to a listed company.

　　D. Internal audit for a listed company.

　　The correct answers are: Provision of recruitment services in relation to a key management position for a listed company; Accounting services to a listed company.

　　IT systems and internal audit services may be provided, providing the auditor will not place significant reliance upon them and that the auditor is not undertaking the role of management.

　　Question：Ideally, who should the internal audit department report to?

　　A. The chief accountant.

　　B. The Audit Committee.

　　C. The Board of Directors.

　　D. The external auditor.

　　The correct answer is: The Audit Committee.

　　Ideally, the internal audit department should report to the Audit Committee. If there is no Audit Committee they should report to the Board of Directors. They do not report to the external auditor as they are employees of the client and they should not report to the chief accountant as the majority of work they perform will be within his department. Reporting to the chief accountant would impair their independence.